|The Bahamas Investor Magazine
January 21, 2010
January 21, 2010
The Bahamas has always been a playground for the mega-rich and their luxury yachts–from sleek, stylish private vessels to opulent superboats with features such as hot tubs, indoor swimming pools and salons. Whatever your vessel, The Bahamas offers an island hopping paradise to the well heeled and the well keeled.
The Bahamas Maritime Authority (BMA)?is working hard to keep these superior vessels and their wealthy patrons coming to Bahamian waters with a radical overhaul of the yacht registry, designed to offer yachtsmen “a seamless and efficient service” right from the start and during the entire ownership phase.
“We are looking to make the current registry more user friendly for private yachts to use our flag,” explains BMA chairman Ian Fair. “If yachts are registered in The Bahamas, that provides more business for multiple elements–the BMA, lawyers, accountants, bankers and tourism generally. Having a Bahamian flag may well attract them to our shores on a more frequent basis than if they were registered elsewhere.”
Formed in 1995 to administer the Bahamas Merchant Shipping Register, the BMA has seen The Bahamas’ ship register become the third-largest in the world.
With some 1,400 ocean-going vessels totalling over 30 million tons, The Bahamas is trailing only Liberia and Panama, according to the BMA’s website. With high-end private vessels and cruise passenger ships, The Bahamas continues to be the flag of choice, spearheading a modern, safety-conscious, international maritime industry.
But competition is tough, particularly in the superyacht (over 78ft in length) class, which, with the average superyacht costing tens of millions of dollars, are owned by some of the richest people in the world. “The main competitors for this business are the Cayman Islands, Bermuda, The Marshall Islands and the UK and Channel Islands (Jersey and Guernsey),” says Fair.
Marinas such as the Nassau Yacht Haven tend to see anywhere from eight to 10 superyachts a month, with the majority being US-registered vessels. According to the Yacht Haven’s office manager, Carol Roberts, the vessels’ length of stay could be as short as a day or as long as a year.
The push to seduce more owners into registering their vessels here ties into the wealth management offerings of The Bahamas’ top-notch financial services sector. Experts say a yacht represents about one-tenth of the owner’s net worth. So a $20-million vessel, for example, is generally owned by a person with $200 million in the bank.
“Many of the world’s high or ultra high-net-worth individuals (defined as having wealth between $30-$50 million) own yachts,” Fair explains. “We want to have a jurisdiction that offers them a one-stop shop for all of their needs.”
One of the country’s leading accounting and professional services firms, Baker Tilly Gomez, has been a strong proponent of the drive to overhaul the registry, as it has extensive experience in the field. “The Baker Tilly organization in the Isle of Man and Jersey [the Channel Islands] happen to be leading firms in that jurisdiction in respect to yacht registration and maritime affairs,” says managing partner Craig “Tony” Gomez. “In fact, the firm alone has in excess of 400 yachts registered.”
The Baker Tilly group of firms has focused on efforts to capture and capitalize on the yacht registration business, with The Bahamas being a prime candidate, says Gomez, who is also chairman of the Bahamas Financial Services Board (BFSB). To that end, he was instrumental in the formation of the BFSB’s fact-finding yacht registry committee in 2009.
In order to capture additional business, Gomez underscores the need to provide outstanding service and strategically promote The Bahamas and the benefits of flying its flag as a jurisdiction with a good reputation. But that alone might not be enough. Other incentives may be necessary.
To lure owners into registering their vessels in the Isle of Man, for example, the wealthy receive tax breaks including zero-rated corporate tax and various value-added tax (VAT) options, no annual tonnage tax charges and no insurance premium taxes. Vessels registered there are entitled to fly the Red Ensign and have access to all British consulates throughout the world.
The downside is that superyachts kept in European Union waters could pay VAT tax from 15-25 per cent of the vessel’s value, depending on the country through which the vessel is first brought into the EU.
According to Fair, depending on the manner of registration here (say, for instance, a Bahamian company) and the residence of the ultimate beneficial owner, there could be “significant”?tax advantages derived from registering a yacht in The Bahamas.
Fattening up the yacht registry, however, will take time, persistence and professionalism. “The numbers are not going to go up overnight,” Gomez advises. “Like everything else, it becomes a matter of promoting one’s self to draw persons to the jurisdiction.”
The initial yacht registration fee is $2,000 for yachts under 2,000 net tons. For yachts over that weight, it is $1 per ton. Thereafter, annual registration is $700 for ships not engaged in commercial trade and $2,552 a year for ships that are for hire.
Atlantis Marina: 63 slips, full-service marina, accommodating yachts up to 236 ft
Nassau Yacht Haven:?100 slips, four slips accommodate vessels up to 200 ft
Paradise Harbour Club & Marina: 23 slips, full-service marina, accommodating yachts up to 200 ft
Nassau Harbour Club Marina: 67 slips, accommodating yachts up to 150 ft
Hurricane Hole Marina: 90-slip, full-service marina accommodating yachts over 200 ft in length
Know your yachts
Yacht: Sleek, stylish, refined, these vessels tend to be around 39 ft.
Superyacht:?Twice as large as standard yachts, features include spiral staircases, salons, hot tubs and other luxury amenities.
Megayacht: To earn the prefix “mega” a yacht has to be at least 147 ft long. These extravagant toys are even more lavishly appointed and could include elevators and aft garages.
Gigayacht: The average length is around 275 ft. An example of a gigayacht is Microsoft co-founder Paul Allen’s $300-million Octopus. Octopus has seven decks, two helicopter landing pads, a swimming pool, basketball court, a concert space for 260 and a recording studio, among other amenities.